Introduction To Auditing Flashcards
The main objective of the _____ is to adopt the standards and practice statements issued by the ______ to attain uniformity of the local GAAS with the international standards.
A. IFAC ; IAASB
B. PICPA ; IAASB
C. AASC ; IFAC
D. AASC ; IAASB
D. AASC ; IAASB
The AASC was created by the ______ upon the recommendation of the Board of Acoountancy to assist the BOA in the establishment and promulgation of Auditing Standards in the Philippines.
A. PRC
B. COA
C. SEC
D. IFAC
A. PRC
Assurance services are best described as
A. Services designed to express an opinion on historical financial statements based on the result of an audit.
B. The assembly of financial statements based on the information and assumptions of a responsible party.
C. Services designed for the improvement of operations, resulting in better outcomes.
D. Independent professional services that improve the quality of information, or its context, for decision makers.
D. Independent professional services that improve the quality of information, or its context, for decision makers.
In performing an attest engagement, a CPA most likely
A. Provides management consulting advice.
B. Expresses an opinion or conclusion about a written assertion.
C. Assesses the risks of material misstatement.
D. Renders litigation support services.
B. Expresses an opinion or conclusion about a written assertion.
The Philippine Framework for Assurance Engagements
A. Identifies engagements to which PSAs, PSREs, and PSAEs apply.
B. Defines and describes the elements and objectives of an assurance engagement.
C. Does not establish standards or provide procedural requirements for the performance of
assurance engagements.
D. All of the above.
D. All of the above.
Which of the following engagements are covered by the Framework for Assurance
Engagements?
A. Consulting and agreed-upon procedures engagements
B. Agreed-upon procedures engagements and Financial statement audits.
C. Compliance audits and financial statement audits.
D. Preparation of tax returns and consulting engagements.
C. Compliance audits and financial statement audits.
The Philippine Standards on Assurance Engagements (PSAEs) are to be applied in
A. Compilation engagements and agreements to apply agreed-upon procedures to
information.
B. The audit or review of historical financial information.
C. Assurance engagements dealing with subject matters other than historical financial
information.
D. Assurance engagements dealing with historical financial information.
C. Assurance engagements dealing with subject matters other than historical financial
information.
Which of the following Standards are to be applied to compilation engagements, engagements
to apply agreed-upon procedures to information and other related services engagements as
specified by the AASC?
A. Philippine Standards on Related Services (PSRSs)
B. Philippine Standards on Auditing (PSAs)
C. Philippine Standards on Review Engagements (PSREs)
D. Philippine Standards on Assurance Engagements (PSAEs)
A. Philippine Standards on Related Services (PSRSs)
The Philippine Standards on Quality Management (PSQMs) are to be applied to
A. Assurance engagements only.
B. Review engagements only.
C. Compilation and review engagements only.
D. All services that fall under the AASC’s engagement standards.
D. All services that fall under the AASC’s engagement standards.
CPAs in public practice who perform assurance engagements are governed by the following,
except
A. Philippine Standards on Related Services
B. Philippine Framework for Assurance Engagements
C. Code of Ethics for Professional Accountants in the Philippines
D. Philippine Standards on Quality Management
A. Philippine Standards on Related Services
The ____________ are issued by the AASC to provide interpretive guidance and practical
assistance to auditors in the implementation of PSAs and to promote good practice.
A. PSRS
B. PAEPS
C. PAPS
D. PREPS
C. PAPS
Practitioners who perform assurance engagements are governed by the
A. Code of ethics for Professional Accountants in the Philippines
B. The Framework for Assurance Engagements
C. Philippine Standards on Quality Management
D. All of the above
D. All of the above
A proposed assurance engagement can be accepted when the practitioner’s preliminary
knowledge about the engagement circumstances indicates that relevant ethical requirements
will be satisfied and
I. The subject matter of the engagement is appropriate.
II. The criteria to be used are suitable and are available to the intended users.
III. The practitioner has access to sufficient appropriate evidence to support the conclusion.
IV. The conclusion is to be contained in a written report.
V. There is a rational purpose for the engagement.
A. I, II, and III only
B. I, II, IV, and V only
C. I, II, III, and IV only
D. I, II, III, IV, and V
D. I, II, III, IV, and V
A practitioner should accept an assurance engagement only if
A. The subject matter is in the form of financial information.
B. The criteria to be used are not available to the intended users.
C. The subject matter is the responsibility of either the intended users or the practitioner.
D. The practitioner’s conclusion is to be contained in a written report.
D. The practitioner’s conclusion is to be contained in a written report.
Which of the following describes how the objective of a review of financial statements differs
from the objective of a compilation engagement?
A. The primary objective of a review engagement is to test the completeness of the financial
statements prepared, but a compilation tests for reasonableness.
B. The primary objective of a review engagement is to provide positive assurance that the
financial statements are fairly presented, but a compilation provides no such assurance.
C. In a review engagement, accountants provide limited assurance, but a compilation
expresses no assurance.
D. In a review engagement, accountants provide reasonable or positive assurance that the
financial statements are fairly presented, but a compilation provides limited assurance.
C. In a review engagement, accountants provide limited assurance, but a compilation
expresses no assurance.
The following statements relate to the performance of an assurance engagement other than
an audit or review of historical financial information covered by PSAs and PSREs. Which is
incorrect?
A. Those persons who are to perform the engagement should collectively possess the
necessary professional competence.
B. The practitioner should consider materiality and assurance engagement risk when
planning and performing an assurance engagement.
C. The assurance report should be in writing and should contain a clear expression of the
practitioner’s conclusion about the subject matter information.
D. The practitioner is precluded from using the work of persons from other professional
disciplines.
D. The practitioner is precluded from using the work of persons from other professional
disciplines.
Unlike consulting services, assurance services:
A. Improves the quality of information
B. Report on how to use information
C. Make recommendations to management
D. Are two-party contracts
A. Improves the quality of information
Which of the following statements is correct?
I. In an assurance engagement, a practitioner expresses a conclusion designed to enhance
the degree of confidence of the responsible party on the outcome of the evaluation or
measurement of a subject matter against criteria.
II. In addition to the Framework and relevant Assurance Standards, practitioners are
governed by the Code of Ethics for CPAs in the Philippines and the Philippine Standards
on Quality Management when performing assurance engagements.
A. I only
B. II only
C. Both I and II
D. Neither I nor II
B. II only
- In an assurance engagement, the responsible party and the intended users
A. Should be from different entities.
B. Should be from the same entity.
C. May be from the same entity or different entities.
D. Are both responsible for determining the nature, timing and extent of the procedures to
be performed.
C. May be from the same entity or different entities.
The subject matter of an assurance engagement may include
Financial information-internal controls-compliance with regulations
A.
YesYesYes
B.
NoNoNo
C.
YesNoYes
D.
NoYesNo
A.
YESYESYES
The recognition, measurement, presentation and disclosure represented in the financial
statements (outcome, criteria, subject matter) result from applying a financial reporting
framework, such as Philippine Financial Reporting Standards (outcome, criteria, subject
matter), to an entity’s financial position, financial performance and cash flows (outcome,
criteria, subject matter).
A. outcome; criteria; subject matter
B. criteria; outcome; subject matter
C. subject matter; criteria; outcome
D. outcome; subject matter; criteria
A. outcome; criteria; subject matter
When performing an assurance service, professional accountants use standards or
benchmarks to evaluate or measure the subject matter of an assurance engagement. These
are referred to in the Philippine Framework for Assurance Engagements as
A. Criteria.
B. Benchmarks.
C. Standards.
D. Yardsticks.
A. Criteria.
Which of the following statements is true concerning evidence in an assurance engagement?
A. Sufficiency is the measure of the quantity of evidence.
B. Appropriateness is the measure of the quality of evidence, that is, its reliability and
persuasiveness.
C. The reliability of evidence is influenced not by its nature but by its source.
D. Obtaining more evidence may compensate for its poor quality.
A. Sufficiency is the measure of the quantity of evidence.
Relevant criteria contribut
e to conclusion that are
A. Free from bias.
B. Clear and comprehensive.
C. Subject to different interpretations.
D. Useful for decision making.
D. Useful for decision making.
